Use Of Insurance Policy Causes Confusion For City

January 19, 1986|by BOB WITTMAN JR., The Morning Call

A million-dollar insurance policy purchased by the City of Allentown last summer to protect the police against lawsuits has caused some confusion within the administration of Mayor Joseph S. Daddona over how it is to be used.

The policy, which cost the city $48,000 and covers claims of between $5,000 and $1 million, has drawn criticism from police, who fear that it may represent a retreat from the city's practice of vigorously defending in court - rather than settling out of court - all legal action brought against the department.

But Daddona, for his part, has said he has no intention of allowing the insurance company's adjusters to settle those cases out of court and has directed his staff to establish clear guidelines on how the insurance protection is to be used.

"Insurance policies are there to cover catastrophic loss," said Karl Kercher, the mayor's administrative assistant, after an inter-departmental meeting last week to discuss the insurance program. "The administration's position to vigorously defend the police has not changed."

Kercher met on Thursday with attorney Thomas Anewalt, the city's new solicitor; Russell McKenzie, the city's risk manager; and representatives from the Police Department to explain the city's intent when it purchased the police professional liability policy from the Calvert Insurance Co. last July 1. It runs through June 30 of this year.

"There were some misconceptions about it," said Kercher, who explained that the policy does not represent a new area of insurance protection for the city as some had at first believed. The city received similar coverage under a three-year policy from Lloyds of London that expired at the beginning of last July. That insurance rolled a variety of liability protections, including those for police, under one policy.

But when the insurance carrier decided to close its North American operations last year and quit offering the single policy, City Council allocated money to the budget of the risk management office to purchase separate policies for the city's vehicular, workmen's compensation, police professional and general liability protection.

Kercher said, however, that the city will still continue to decide which suits it will fight with its own attorneys and which it will turn over to the insurance carriers for settlement.

"We will continue to determine the destiny of those suits," said Kercher. "That has not changed."

The concern of the police, saidRonald Manescu, president of Queen City Lodge No. 10 of the Fraternal Order of Police, is that suits against the police that are settled out of court only inspires others to file similar suits.

"If the guy didn't do anything wrong, there should not be that settlement," said Manescu. "People are taking advantage of what they see as a way to make fast money."

So serious is the threat of these frivolous suits, said Manescu, that the FOP is considering launching a campaign of countersuits against unsuccessful complainants in an attempt to discourage others from rushing into court when they believe they've been falsely arrested, defamed or handled roughly by the police.

"It's demoralizing," said Manescu. "We arrest people and we wind up being on trial."

Another problem, he said, is that when suits against police officers are settled out of court, the credibility of those individuals is harmed the next time they must testify for the prosecution in a criminal case. He said it is common for defense attorneys to attempt to cast doubts about a police officer's reputation by telling jurors of successful civil judgments against him.

"It is incumbent upon the city to very vigorously defend police officers involved in any kind of litigation," Howells said. "We're not buying our way out."

Kercher said he agrees with the point of view of the police and said the professional liability policy would only be used when the department is clearly at fault. But Kercher admitted that those instances are rare.

"We may never use it," he said.

Daddona said he believes it may have been a mistake for the city to have purchased the police professional liability coverage in the first place since all litigation against the department in recent years has been defended by either the city's legal staff or by attorneys hired by the city for the purpose.

And while that has been the administration's practice all along, the mayor blames the recent confusion on his own failure to commit that understanding to formal written policy.

"I'm not sure who made the decision to buy the insurance," Daddona said, "but it was made, I'm sure, in the best interest of the city."